A budget deal secures the project 25 percent of cap-and-trade revenue moving forward.
It's been clear for some time that California would have to find another way to pay for its high-speed rail line between Los Angeles and San Francisco. Federal funding dried up after the 2010 midterm elections, when conservative opposition overwhelmed President Obama's national high-speed rail plan. When a court questioned the project's funding plan last fall, many observers felt California would need to put up even more of its own money.
Now it's done just that. The state's new budget secures high-speed rail 25 percent of California cap-and-trade revenue each year moving forward — revenue described by the Sacramento Bee as "money polluters pay to offset carbon emissions." Reports estimate the deal could eventually deliver between $3 billion and $5 billion in annual funding to the country's most ambitious transportation project.
So that's big news. Very big. Robert Cruickshank, author of the California High Speed Rail Blog, calls it "perhaps the best news California HSR has had in over five years," and he would know.
What makes the deal so significant is that the rail authority now has a steady funding source to borrow against. The project can take out a federal loan, for instance, or see if the prospect of future public money encourages private investors to put up their own cash. The Associated Press reports that nine "major engineering and construction firms" have written letters supporting the deal:
AECOM, a Los Angeles-based engineering firm, wrote that multiyear funding "sufficient to move the project forward on a more aggressive timeline, would attract our firm and private sector competitors from around the world."
This being the California high-speed rail project, not everyone is happy. Republican lawmakers are certainly no fans of the deal, and Congressman Kevin McCarthy — who appears poised to become U.S. House Majority Leader — has vowed not to give the project "one dollar" of federal money.
Some Democrats and environmentalists oppose the deal, too. One Democratic state senator who helped author the state's greenhouse gas legislation told the AP the high-speed rail project doesn't have enough short-term environmental benefit to deserve so much cap-and-trade funding. The Sierra Club voiced a similar sentiment to Stephen Smith of Next City in January, when rumors of budget deal surfaced, saying it felt "irresponsible" not to devote emissions revenue to programs that fight climate change right now.
These points are well-taken; the quicker California (and everyone) can reduce emissions, the better. But short-term transportation fixes won't mean as much without the long-term plans to back them up. It's important to keep in mind that if California high-speed rail lives up to its potential it won't just offer people another travel option in the L.A.-S.F. corridor, it will change the way many people in that region think about transportation in the first place.
That's a long way off. For now it's enough to know that, for the first time in a long time, what's clear is not the need for the project to take a new direction but rather the need to follow the current one.